There is an Unbelievable Market in Europe
Date: Monday , February 01, 2010
Speeding through Europe either as a tourist or business person you may be pleasantly surprised to find how the Euro facilitates your travel everywhere, save in a few countries. The Euro has simplified your money transactions. But transaction efficiency has not translated into an economic upswing. In fact, one may argue that compared to traditional lifestyles the Euro has slowly but surely brought down economic indicators across the region. The much talked about ‘classless society’ of Europe is slowly giving way to the pattern of ‘rich’ and ‘poor’ with ample evidence of the cost of living skyrocketing everyday. Narrating his woes, a big city taxi driver says he can only afford living in the suburbs; his daily commuting cost is killing him. Opulence versus scarcity may not be as visible as in an emerging country as the basic level in the West is more advanced; there may be no abject poverty, but stress levels are indeed very high. The social fabric of the egalitarian society is coming apart.
Globalization has thrown up a set of circumstances that Europeans find challenging to deal with. Europe’s original population is decreasing; immigrants, mainly from Africa and Asia are taking over those labor-intensive jobs that Europeans are not interested in. As a consequence, immigrant related issues create discomfort without anybody willing to tackle them.
The fear of sudden terrorist attacks from anywhere in the world has made security a top-of-mind subject. Education systems lag behind more competitive economies. The fear of AIDS is interfering in lifestyle, making people introverted, narrowing their social subsistence. With outsourcing work to cheaper shores, there is scarcity of jobs in Europe. Global warming is spelling doom and destruction and environmental pollution is quite visible. And at a holistic level, there is a lack of leadership and political will, coupled with a huge distrust in the political system among the proletariat. The rise of India and China has further dented the public’s confidence who perceive this development with more fear and awe, rather than with realism. This lack of mental confidence has drastically reduced the desire level of people in Europe. The markets have become saturated; somewhere that excitement and dynamism are missing.
Contrast with India
Compare this to the situation in India. Since the introduction of economic reforms in 1991 and fully opening up to global markets after signing the WTO agreement in 2003, people in the metro areas, urban, semi-urban, and even rural areas are all prospering. The free market and global business opportunities, especially in services, have given rise to financial fluidity in India. Salaries have risen, there is disposable income and retail banking is at a high pitch. From being a protected economy since independence in 1947, Indian markets offer the consumers an enormous choice today. So the middle class has enthusiastically migrated from the need level to an immoderate desire level.
Europe: Pluricultured Continent
Their varied socio-cultural roots and very different food habits have made European countries pluricultured with an under-current of intolerance. This introverted approach automatically reflects in the behavior of people which varies from one country to another. Business has somehow picked up these characteristics too, with every region requiring customized marketing techniques. The uni-disciplined American way tells you the easy route to business. Europeans and Americans, apart from their common Caucasian heritage, have very few traits in common. Europe has big business resources too, but being a pluricultured continent, it has great complexities too.
Traversing the trans-European consuming society across all economic strata today, you will find that their latent desire is to go for products that are not marketing vampires. They talk about simple looking products that have their natural efficiency to function sincerely with quality that is genuine. After the invention of email in 1972, Europeans claim there has been no major fundamental invention. They don’t see any visible differences in their essential to desirable products. Technology has definitely enhanced, but it brought in standardization rather than creating unique differentiation. So marketing has become suspect, and they say everything is sold through marketing gimmicks.
The takeout of all European consumers is that all products have become marketing gimmicks. Their content lacks the real stuff to be differentiators. Marketing gimmicks alone make the difference and increase the product price.
Me & I Europe
There is tremendous spread of the egocentric, iPod-like ‘Me & I’ culture throughout Europe. The seven-obstacle steps (see the figure ‘The seven step cloud’ above) disturbing the mental peace of Europeans have created a very different personal benefit lifestyle for them, especially as personal life security has become extremely important in every aspect. Consequently, the social system is undergoing a change, and most European products are concentrating on providing individual satisfaction. The impact is that the family concept is no longer the flair of the times; both hetero-sexual and homosexual couples live more in partnership and largely without long-term commitment. There are people who share living space for economic reasons because of the spiraling cost of living as well as just for companionship. Those who live alone can perhaps afford to do so and enjoy it, but a trend also shows that they cannot take the stress of sharing, are social misfits, or have lost a companion. The impact is creating an altered social system, and this has become a platform that business has to connect to.
Business Opportunity for India
The tremendous opportunity in Europe can be exploited by Indian business if they can respect the ‘Me & I’ and pluricultural factors prevalent there. For example, traditional, once- sought- after- and- now- unavailable products can be identified, produced, branded, and sold in retail outlets to expand business in Europe. Such products could at once be time differentiators, sincere, as well as inexpensive. They can even be promoted on a platform of “We don’t have advertising and marketing spends, so our product price is low. Our product is sincere and genuine.”
A high level of simplicity can make the difference for India, instead of trying to further European aesthetics and functionality in a product. Comfort, of course, is paramount as it was historically with European monarchy who achieved it then by using poor people as slaves. Today, when the entire population has been elevated into comfort, immigrants are invited from Africa for manual jobs. Since lifestyles have further improved in this digital age, the bulk of the IT, IT-enabled services, and bulk manufacturing jobs are being outsourced to countries like India and China with finicky demand on superior functionality and quality.
Indian business people can change from being a supplier to marketer to establishing a brand with a quality product. Without compromising on simple looks, sincere functions, and genuine quality and by being end-customer centric, India can manufacture and directly market primary need products of everyday life for Europe’s 450 million population. The business process can avoid all marketing and advertising cost of the brand by putting the entire effort on distribution and retailing in partnering with European business people to reduce the investment outflow. Such a route can make Indian branded products essential for Europeans, meeting their needs and desire as well.
Japan and Korea brought sophistication and miniaturization of products to the West. China excels in low cost manufacturing. India has the opportunity of bringing simple looking, sincere functioning and genuine quality products to the European market. Becoming a provider of daily use products for regular or periodic purchase, the Indian manufacturing system can acquire global recognition which encompasses performance of the brand, R&D, manufacturing, quality, and marketing. Indian business will simultaneously be able to generate jobs and growth for their underprivileged countrymen.
The author is Founder & CEO, Shining Consulting